FEGLI Insurance After Federal Service: Retirement Options and Coverage Changes

FEGLI is a popular insurance program that provides life insurance coverage to federal employees. However, many individuals are unsure about their options for insurance after they leave federal service. It’s crucial to have a clear understanding of the alternatives available to you and how they can meet your needs.

After your federal service ends, you may have several options for insurance coverage. Understanding these options and making the right choices can ensure that you have the necessary coverage to protect yourself and your loved ones. In this blog post, learn about the various alternatives to FEGLI insurance after federal service and how it can guide you in making informed decisions about your insurance needs.

Understanding FEGLI Insurance

Understanding the Federal Employees’ Group Life Insurance (FEGLI) program is crucial for federal employees and retirees who want to make informed decisions about their insurance coverage. FEGLI is a group life insurance program that provides coverage for federal employees, including both full-time and part-time employees. It offers various benefits, such as basic insurance, optional insurance, and family insurance.

It’s important to note that enrollees can decide whether or not to participate in the optional insurance plans. However, they should carefully consider factors such as their needs, dependents, and financial situation before making a decision.

FEGLI Coverage Options and Plans

FEGLI offers different coverage options and plans to cater to the diverse needs of federal employees. These options are designed to provide a comprehensive range of coverage that can be tailored to individual circumstances.

Option A

Option A (standard) provides a fixed $10,000 coverage amount that remains constant throughout an employee’s career. This coverage is independent of an employee’s salary and can be a suitable choice for those who want a small additional benefit.

Option B

Option B (Additional) allows employees to choose coverage in multiples (1, 2, 3, 4, or 5) of their annual salary. The cost of this coverage depends on the employee’s age and the multiples selected. 

Option C

Option C (family) provides life insurance coverage for eligible family members – spouse and dependent children). The employee can select one to five multiples of coverage for each eligible family member. The cost of Option C also varies based on the number of multiples chosen.

It’s important for employees to evaluate their personal circumstances, financial goals, and the needs of their families when considering which coverage options to elect. Evaluating factors like dependents’ educational expenses, mortgage payments, and retirement plans can help individuals determine what level of coverage is appropriate for them.

Understanding the coverage options and plans offered by FEGLI is crucial for federal employees who want to make informed decisions about their life insurance needs. By evaluating individual circumstances and weighing the associated costs and benefits, employees can select the most suitable coverage options within the program.

Who is eligible for FEGLI options?

To be eligible for FEGLI insurance, you must be a federal employee working in an eligible position and enrolled in the Federal Employees Health Benefits (FEHB) program. This includes employees of various agencies, such as the executive, legislative, and judicial branches, as well as certain non-appropriated fund instrumentalities. 

Eligible individuals must have completed one full year of continuous employment or be scheduled to work for at least one year. It’s worth noting that part-time employees can also participate in the FEGLI program if they are regularly scheduled to work at least 32 hours per biweekly pay period.

It is important to keep in mind that not all federal employees are automatically enrolled in FEGLI insurance. New employees have a limited period known as an open season to enroll themselves without undergoing medical underwriting. For employees who missed this opportunity or joined after the open season, they may need to undergo medical underwriting and provide evidence of good health to enroll in or increase their coverage.

FEGLI Coverage Changes After Federal Service

The FEGLI insurance coverage undergoes some changes when a person retires from federal service. These changes depend on factors such as your age, retirement status, and the specific coverage options you had while working.

One key change is that basic life insurance becomes free for all retirees after reaching age 65, with no reduction in coverage. This means that retired federal employees aged 65 or older will continue to have the same level of basic life insurance coverage they had while working but without the need for any premium payments.

In addition to basic life insurance, there are three optional coverages available under FEGLI: Option A, Option B, and Option C. The premium costs and coverage amounts vary depending on age and personal circumstances. After reaching age 65 or retiring, there are specific changes to each of these options:

It’s important to note that premium changes become effective the first month following your 65th birthday or retirement date. Additionally, the cost of Option A and Option B insurance can change when transitioning to a different age group, and any premium adjustments will become effective at the beginning of the following month.

FEGLI Retirement Options and Modifications

As federal employees approach retirement, it is crucial to understand the various options and modifications available for their FEGLI coverage. After retiring from federal service, employees have a few choices regarding their life insurance coverage.

Federal employees can continue the basic insurance they had during their employment into retirement. However, this is subject to certain requirements, including being insured for at least five years before retiring and being eligible for an immediate retirement benefit. The cost of continuing FEGLI coverage in retirement is based on the employee’s age and the amount of coverage. Generally, it is less expensive than purchasing a similar individual policy.

Retired federal employees also have the flexibility to reduce their FEGLI coverage by multiples of their salary or cancel it altogether. However, once canceled, it cannot be reinstated. Therefore, it is important to carefully evaluate whether reducing or canceling coverage aligns with their financial goals and potential future obligations.

It is crucial for federal employees approaching retirement to review their FEGLI coverage options thoroughly and consider their personal circumstances before making any decisions. Consulting with financial advisors or insurance professionals can provide further guidance in navigating these choices.

Work With FEGLI Exchange Program Today

Are you a federal employee looking for better options for your life insurance coverage? The FEGLI Exchange Program offers a unique opportunity for federal employees to explore alternative life insurance options that may better suit their needs. With this program, you can have more control over your coverage and potentially save on premiums.

Imagine having the flexibility to choose a plan that fits your specific needs and budget, rather than being limited to the one-size-fits-all approach of the traditional FEGLI program. By participating in the FEGLI Exchange Program, you can have peace of mind knowing that you have the right coverage for yourself and your loved ones.

Take action today and explore the benefits of the FEGLI Exchange Program. Contact us today at (254) 203-9521 to learn more and start the process of finding the perfect life insurance solution for you.